Wal King caught up in battle for Bumi

Business columnist

Former Leighton Holdings boss Wal King has found himself at the centre of what is shaping up as a fierce battle to seize control of a listed miner in London, with shareholders set for a showdown next month.

Mr King, who retired from Leighton two years ago, has been approached to chair listed coal miner Bumi Plc, pending the outcome of a proposal to oust the incumbent board and chief executive and buy out a key shareholder.

An extraordinary general meeting has been requisitioned for early February after Bumi Plc’s share price fell 70 per cent last year.

It is understood that financier Nat Rothschild, who co-founded Bumi Plc in 2010 with Indonesia’s high profile Bakrie family through its shareholding in Bumi Resources, approached Mr King to help spearhead his push to sever Bumi Plc’s relationship with Bumi Resources. He wants to buy out the Bakrie family’s stake by raising between £200 million and £300 million on the London stockmarket.

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It is believed that Mr King’s experience in Asia and contract mining was behind the decision to offer him the role as chairman.

He was chief executive of Leighton for 23 years. During his reign he took the construction company from a market capitalisation of $70 million to $10.3 billion by expanding into Asia and creating the biggest contract miner in the world.

Mr King left in January 2010 after a bitter falling out with Leighton’s major shareholder, Hochtief.

Mr Rothschild and Mr King are believed to be acquaintances along with Russian billionaire Oleg Deripaska.

Between now and Bumi Plc’s EGM there is expected to be a dog fight as Mr Rothschild pushes forward his proposal and the Bakrie family puts forward its proposal to buy all of Bumi Plc’s coal assets.

According to the Financial Times, Mr Rothschild has won the support of Schroders and some other key investors to replace the board. He needs 50 per cent to win control of the company, while Bakrie is believed to have about 30 per cent support.

Bumi Plc was created in 2010 when Mr Rothschild, who had a cashbox company in London, was approached by the Bakrie family to take a cross-shareholding as part of a plan to give the Indonesian coal mining company access to the UK market.

Bumi Plc ended up with a 29 per cent stake in Bumi Resources and 85 per cent of Berau, another Indonesian coal miner.

The tie-up was a disaster and the relationship between Mr Rothschild and the Bakries disintegrated. Mr Rothschild, who holds more than 12 per cent of the voting rights in Bumi Plc, resigned from the board late last year.

On Monday he put forward a proposal for a new board with Brock Gill as chief executive, Mr King as chairman, himself as an executive director, Jonathan Djanogly, a corporate governance expert and former justice minister, as a non-executive director.

He also wants to bring a former British ambassador to Indonesia on to the board.

Bumi Resources posted a $US633 million loss for the first three quarters of last year and must pay off more than $US3 billion in debt by 2017.